NasdaqGM:LOVE

Stock Analysis Report

Executive Summary

The Lovesac Company designs, manufactures, and sells foam filled furniture, sectional couches, and related accessories.

Rewards

Trading at 82% below its fair value

Earnings are forecast to grow 63.86% per year

Risk Analysis

Shareholders have been substantially diluted in the past year

Has less than 1 year of cash runway

Highly volatile share price over past 3 months



Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Lovesac's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LOVE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.6%

LOVE

1.7%

US Consumer Durables

1.5%

US Market


1 Year Return

-61.4%

LOVE

35.4%

US Consumer Durables

20.1%

US Market

Return vs Industry: LOVE underperformed the US Consumer Durables industry which returned 35.4% over the past year.

Return vs Market: LOVE underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

LOVEIndustryMarket
7 Day5.6%1.7%1.5%
30 Day-14.2%4.4%1.4%
90 Day-19.6%8.2%8.7%
1 Year-61.4%-61.4%37.3%35.4%22.7%20.1%
3 Yearn/a37.4%31.2%50.1%40.5%
5 Yearn/a40.0%30.7%73.1%54.1%

Price Volatility Vs. Market

How volatile is Lovesac's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lovesac undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LOVE ($10.94) is trading below our estimate of fair value ($60.63)

Significantly Below Fair Value: LOVE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LOVE is unprofitable, so we can't compare its PE Ratio to the Consumer Durables industry average.

PE vs Market: LOVE is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate LOVE's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: LOVE is overvalued based on its PB Ratio (1.9x) compared to the US Consumer Durables industry average (1.5x).


Next Steps

Future Growth

How is Lovesac forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

63.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LOVE is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: LOVE is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: LOVE's is expected to become profitable in the next 3 years.

Revenue vs Market: LOVE's revenue (15.4% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: LOVE's revenue (15.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if LOVE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Lovesac performed over the past 5 years?

-35.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LOVE is currently unprofitable.

Growing Profit Margin: LOVE is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: LOVE is unprofitable, and losses have increased over the past 5 years at a rate of -35.3% per year.

Accelerating Growth: Unable to compare LOVE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LOVE is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Durables industry (9.1%).


Return on Equity

High ROE: LOVE has a negative Return on Equity (-14.43%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Lovesac's financial position?


Financial Position Analysis

Short Term Liabilities: LOVE's short term assets ($95.4M) exceed its short term liabilities ($31.8M).

Long Term Liabilities: LOVE's short term assets ($95.4M) exceed its long term liabilities ($2.5M).


Debt to Equity History and Analysis

Debt Level: LOVE is debt free.

Reducing Debt: LOVE had no debt 5 years ago.


Balance Sheet

Inventory Level: LOVE has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if LOVE's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: LOVE has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: LOVE has sufficient cash runway for 1.2 years if free cash flow continues to reduce at historical rates of -33.6% each year.


Next Steps

Dividend

What is Lovesac's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate LOVE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate LOVE's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LOVE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LOVE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LOVE's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure


CEO

Shawn Nelson (42yo)

3yrs

Tenure

US$2,601,727

Compensation

Mr. Shawn David Nelson Founded LoveSac Alternative Furniture Co. (known as LoveSac Corporation) in 1998 and serves as the Chief Executive Officer and Director. Mr. Nelson is the lead designer of its patent ...


CEO Compensation Analysis

Compensation vs Market: Shawn's total compensation ($USD2.60M) is above average for companies of similar size in the US market ($USD1.11M).

Compensation vs Earnings: Shawn's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Shawn Nelson
Founder3yrsUS$2.60m1.6% $2.5m
Jack Krause
President & COO5.1yrsUS$1.29m0.84% $1.3m
Donna Dellomo
Executive VP3yrsUS$907.78k0.45% $720.6k
David Jensen
CTO & Chief Information Officer2.1yrsno datano data

3.0yrs

Average Tenure

55yo

Average Age

Experienced Management: LOVE's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Shawn Nelson
Founder3yrsUS$2.60m1.6% $2.5m
William Phoenix
Independent Director9.8yrsno datano data
Andrew Heyer
Chairman of the Board3yrsno data0.25% $404.3k
John Grafer
Director2.7yrsno datano data
Jared Rubin
Independent Director5.7yrsno datano data
Shirley Romig
Independent Director0.7yrsno datano data
Walter McLallen
Independent Director0.7yrsno datano data

3.0yrs

Average Tenure

51yo

Average Age

Experienced Board: LOVE's board of directors are considered experienced (3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: LOVE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 62.4%.


Top Shareholders

Company Information

The Lovesac Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Lovesac Company
  • Ticker: LOVE
  • Exchange: NasdaqGM
  • Founded: 1998
  • Industry: Home Furnishings
  • Sector: Consumer Durables
  • Market Cap: US$159.052m
  • Shares outstanding: 14.54m
  • Website: https://www.lovesac.com

Number of Employees


Location

  • The Lovesac Company
  • Two Landmark Square
  • Suite 300
  • Stamford
  • Connecticut
  • 6901
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LOVENasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDJun 2018

Biography

The Lovesac Company designs, manufactures, and sells foam filled furniture, sectional couches, and related accessories. The company offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and accessories comprising drink holders, foot sac blankets, decorative pillows, fitted seat tables, and ottomans. It markets its products through its approximately 75 showrooms at top tier malls, lifestyle centers, and street locations in 30 states of the United States, as well as through online. The Lovesac Company was founded in 1998 and is headquartered in Stamford, Connecticut. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 01:07
End of Day Share Price2020/02/14 00:00
Earnings2019/11/03
Annual Earnings2019/02/03


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.